Creative people working in the liberty movement often have a hard time getting their ideas funded. Let’s face it: much of the movement is controlled by big donors and small committees of stewards. These committees have good intentions, but sometimes they distribute their largess like charitable Keynesians. And in 1960s fashion, it’s often a game of “who you know.”

Worse, perhaps, smaller donors tend to look at a popular think tank brand like Heritage or Cato and simply throw money over the wall during the holidays in hopes the money does some good. The trouble is, bigger organizations can carry a lot of administrative fat. And on a per-dollar basis, these mastodons are not always particularly effective.

Crowdfunding could help change all that.

Let me tell you a little bit about my own experience. (Warning: shameless plug.) I’m using Kickstarter to fund a book project called “Superwealth” in which I defend wealthy entrepreneurs. Because I don’t have the time, patience or inclination to go through traditional publishing channels — a process that can take as many as three years — I decided it was time to do things my way.

So far I’ve done pretty well. I’ve got a publisher and promoter lined up and will pull the trigger next month if my crowd comes through. It looks like the book will be published this year. Of course, my little experiment may not succeed. But I’d rather leave that to the crowd than to the committee (or to the public rather than the publisher) — at least in this case.

Committees v. crowds

When it comes to philanthropic endeavors, the crowd is not necessarily better than the committee. The dynamics are just different.

Committee pros — The positive side of Big Philanthropy is that it forces you to do your due diligence. You can’t just come up with some half-baked idea and get it funded. The committee will take a careful look at what you’ve proposed and suggest changes. If your idea is wonderful only to you, that feedback can be helpful. Foundations are also able to bring bigger dollars to longer-term endeavors and projects that require more capital. And if you do get funding, you benefit from the smarts of the folks on these committees.

Committee cons —On the downside, committees are slow and insular. They often convene but a couple of times a year in short bursts. They tend to privilege people and organizations they are familiar with. And they tend to put money on surer bets. Sometimes you have to do something wacky to win big. Sometimes you have to step outside your comfort zones. Unfortunately, committees are almost always comfort zones. Because insiders have better access to the committee, they usually get the largess. This is a problem in the sense that just getting the committee’s attention can be a high-cost proposition for most creatives. And if you can get in, you usually have to offer them a project that ain’t all that wacky (which is one reason there are too many policy analysts creating too many white papers no one will ever read).

Crowd pros — When it comes to crowdfunding, there are definite advantages to little guys with innovative plays. Consider that if someone is only giving $20, she might be more likely to take a chance on something non-conventional. It’s not just that you can involve people that might not otherwise have been involved; it’s also that you can include younger people in the funding process. That’s how crowdfunding can help “democratize” philanthropy in the liberty movement. Younger people often have a higher tolerance for risk than older people, despite having fewer resources at their disposal. (And most crowdfunding sites build in rewards. For example, if you gave $15 to my “Superwealth” campaign, you’d get an eBook.)

Crowd cons — Crowdfunding does have its negatives. It’s not as easy to determine the success or failure of a project (or the track record of the proposer). Crowdfunding centers on ideas rather than outcomes. Committees, because they have much more skin in the game, demand evidence of impact — success metrics and so on. Next-generation crowdfunding sites/aps may include reputation or ratings systems. But, generally, micro-funders have fewer incentives to follow up on success. Without accountability incentives and mechanisms, the ratio of crappy projects to home runs may be more skewed than in traditional philanthropy.